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Monday, 24 August 2015

Basic Accounting terms for Beginners - Presentation and Explanation

Understanding the basic concepts and the terminology in any subject that you want to study is of great value and importance. It will not only help you develop the required skills, but it also enable you to deepen your knowledge or understanding of the subject. It is appropriate to mention that acquiring the basic knowledge and skills of a subject can lead you to gain thorough understanding of a subject.

Accounting is regarded as a Business Language. It is of great essence for a business to establish a good accounting system in order to keep track of every single business transaction or a business event and determine the profitability by dint of income statement and the status of a business with the help of balance sheet.

Accounting is also connected with our personal lives. It is easy to understand and implement for our day-to-day activities that involve money. It is therefore important to understand some of the accounting terms. Accounting term is a specific word that is related to the whole process of accounting. Some of the important accounting terms are mentioned herein.

Accounting – It’s a business language. The art of analyzing, recording, organizing or classifying and maintaining financial activities or the events that are of financial character which in turn leads to prepare financial statements.

Account – An individual record of specific items. It is a summary of all the business transactions relating to assets or liabilities or capital or revenues or expense etc. Every account has two sides, debit and credit showing accumulated balances.

Accounting Equation – It shows the relationship between the assets, liabilities and capital of a business entity. The accounting equation is: Assets = Liabilities + Capital. The accounting equation states Left hand side equals to Right hand side.

Accounting Period- It indicates the period of time which is no more than twelve months – from January 1 through 31 December. It’s generally a calendar year or a quarter taking the span of time covered by a set of financial statements, income statement, balance sheet and the cash flow statement.

Business Transaction – Any business activity or event that effects a business to show what it owns and what it owes as well as the ownership of the business. For example: A short term Loan amount from bank being debited to cash account and credited to bank account represents that a business house owns the amount and at the same time it owes to bank while making the balances in agreement as assets equals to liabilities.

Debtors – They are the customers or the clients whom a business provides goods or services on credit. They are the ones who owe money to the business.

Creditors – They are the persons whom a business owes the money.

Capital – Capital is the amount that has been invested by the owner or proprietor in the business.

Saturday, 22 August 2015

The Cost Concept in Accounting

The cost concept is one of the basic underlying guidelines in accounting and understanding which enables accountants to maintain the accuracy in the profession. Below article discusses the cost concept in brief.

In accounting, cost is defined as the cash amount or the cash equivalent which is given up for an asset. It includes all costs necessary to get an asset in place and ready for its intended use. To give an example, the cost of an item in inventory also includes the item’s freight-in cost. As regards the cost concept, it is one of the basic underlying guidelines in accounting. It is also known as the historical cost principle. The assertion made under the cost concept is that assets should be recorded at the cash amount or its equivalent at the time when they are acquired.

In accordance with this concept, it is important to note that regardless of whether the cost or acquisition price of an asset is greater or lesser than the fair market price, but the asset is to be recorded in the accounting books at the price which is actually paid. At this point, it is important to be aware of what the fair market price is. Fair market price is the price of something at which both a seller and a buyer are willing to make a deal. It may further be noted that it is the amount at which an asset would change hands between two parties where both have knowledge of the relevant facts.

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Causes and Management of Stress at Work

Stress management refers to the wide spectrum of techniques and psychotherapies aimed at controlling a person's levels of stress, especially chronic stress, usually for the purpose of improving everyday functioning.

Every individual has certain amount of tolerance towards pressure. It can be inescapable, rather acceptable in terms of the achievement of positive results of the organization within the limited span of time. But when it continues too long, it becomes stress – Pressure which is bearable is converted into stress after it exceeds certain limit. Stress may in general be defined as continuous feelings of worry about your work or personal life that prevents you from relaxing. It has also been defined as, “The reactions of individuals to new or threatening factors in their work environments.”

There are situations when the stress leads to negative response. Stress is manifested in many ways, such as, short temperament, panic reactions and irritability. It can be positive or negative. If an employee is going to get a new position which is dynamic and full of challenges, he develops positive stress. Alternatively, there may be situations that are threatening and anxiety-arousing which create negative stress. There are many causes for stress to develop.

One of the causes of stresses at work relating to the tasks an employee handles is the task itself. How it has been proposed or designed, how much time is required to carry out the task and how much time is to be spent on it. At the same time, what his manager expects from him or her in terms of the tasks being assigned. All these factors are related to work and cause stress.

About me

I am an Individual Member of Institute of Management Consultants of India. I am a Professional with a high creative capability based on Business, Management, Financial Accounting, Management Accounting, Finance, Management Consulting and Computer programming background. I impart part time training and development programs. I write professional articles on the aforementioned subjects including Software Engineering. My writings have appeared in various Journals, magazines, news papers and news letters. I have also written books/eBooks on business and management subjects including business English.

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Monday, 24 August 2015

Basic Accounting terms for Beginners - Presentation and Explanation

Saturday, 22 August 2015

The Cost Concept in Accounting

Causes and Management of Stress at Work